ADVOCATE
ABC OPPOSES NLRB RULE AFFECTING CONTRACTORS | Revised Rule Could Disrupt Contractor Relationships and Increase Project Costs, ABC Warns In a recent press statement, Associated Builders and Contractors (ABC) voiced its concern over the National Labor Relations Board’s (NLRB) latest joint employer final rule. The rule, which replaces the 2020 standard endorsed by ABC, introduces a broader scope of joint employer liability under the National Labor Relations Act. The construction industry, known for its intricate network of contractors and subcontractors, stands at the cusp of facing significant operational upheaval due to this change. Ben Brubeck, ABC's Vice President of Regulatory, Labor, and State Affairs, expressed trepidation about the rule's implications. "The construction sector, pivotal in shaping America's infrastructure, could see a detrimental shift in its foundational contractor-subcontractor dynamics," said Brubeck. He emphasized that this expansion of joint-employer liability might saddle contractors with unwarranted risks and liabilities, potentially deterring them from engaging with subcontractors. Small businesses, which form the backbone of the construction industry, are likely to bear the brunt of these policy shifts. The confusion and lack of clear guidelines can result in a domino effect, culminating in project delays and inflated costs—effects that taxpayers could ultimately shoulder, especially in public infrastructure initiatives. ABC has strongly hinted at considering legal action to contest the NLRB's final rule.
Recent Developments
Small businesses are not just a segment but the majority in the construction domain, with 99% of companies employing fewer than 100 construction professionals, as highlighted by the U.S. Census Bureau. The new joint employer rule could have profound effects on these firms, challenging the stability of an industry that is a crucial player in the national economy. In a proactive measure, on December 7, 2022, ABC submitted a plea to the NLRB to reconsider and retract the proposed rule, underscoring the potential adverse consequences on the industry. Source: https://www.abc.org/News-Media/News-Releases/abc-nlrb-jointemployer-final-rule-will-harm-small-businesses
NLRB Extends Effective Date of the Joint Employer Final Rule to Feb. 26, 2024 On Nov. 16, the National Labor Relations Board extended the effective date of its final rule on Joint Employer Status Under the National Labor Relations Act from Dec. 26 to Feb. 26, 2024. The new standard will only be applied to cases filed after the rule becomes effective. On Nov. 9, ABC joined the U.S. Chamber of Commerce and a coalition of business groups in filing a lawsuit challenging the NLRB’s final rule for violating the National Labor Relations Act and for acting arbitrarily and capriciously in violation of the Administrative Procedure Act. The final rule takes an ax to the ABC-supported 2020 NLRB joint employer final rule, which provided clear criteria for companies to apply when determining status. Resources: ABC General Counsel Littler Mendelson’s analysis of the final rule - https:// www.littler.com/publication-press/publication/nlrb-final-joint-employer-ruledramatically-expands-definition-joint NLRB press release - https://www.nlrb.gov/news-outreach/news-story/boardissues-final-rule-on-joint-employer-status NLRB fact sheet - https://www.nlrb.gov/sites/default/files/attachments/pages/ node-9558/joint-employer-fact-sheet-2023.pdf ABC members-only archived webinar, Learn About Recent Developments at the NLRB Affecting Merit Shop Contractors - https://www.abc.org/academy
30
BUILDING Central Florida 2023 - DECEMBER
The NLRB’s new joint employer final rule will disrupt longestablished, efficient operational processes followed by construction service providers that work together to build America. As a result of the confusion and policy whiplash caused by this overbroad standard, contractors will be vulnerable to increased liability and risk, making them less likely to hire subcontractors, most of which are small businesses.
Serving the Construction Industry Statewide for over 32 years.
No Setup or Membership Fees (407) 834-9288 • www.ntoflorida.com 2917 West State Road 434, Suite 101 • Longwood, FL 32779
